ALJDEC decisions subject to certification as final

2020A-05256-CHC-ROC · Registrar of Contractors · 2021-05-06

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Bridget L Wood ,

COMPLAINANT,

v.

Coues Ridge Construction LLC

License No. ROC 191530,

RESPONDENT.

No. 2020A-05256-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: April 16, 2021 at 9:00 AM.

APPEARANCES: Bridget Wood (“Complainant”) appeared on her own behalf. Christopher Allison appeared on behalf of the Arizona Registrar of Contractors (“Registrar”). Aaron “Buck” Binnie appeared on behalf of Coues Ridge Construction LLC (“Respondent”). Jeff Wood observed.

ADMINISTRATIVE LAW JUDGE: Jenna Clark.

_____________________________________________________________________

After review of the hearing record in this matter, the undersigned Administrative Law Judge makes the following Findings of Fact and Conclusions of Law, and issues this Recommended Order to the Director of the Registrar.

FINDINGS OF FACT

Background and Procedure

Pursuant to Ariz. Admin. Code R4-9-117, Administrative Notice is taken of Respondent’s prior License record as reflected on the Registrar’s public website. The Registrar issued License No. 191530 General Dual KB-1 Residential and Commercial contracting license to Respondent. The license is currently active and renewed through January 31, 2022. Aaron Michael Binnie is the Qualifying Party/Member on this license. Respondent’s address of record for the license is 1740 Fairway Dr. Show Low, AZ 85901. Respondent has an active $14,000.00 surety bond on the licensed issued by Merchants Bonding Company effective February 15, 2018. There is no prior discipline noted for the license, save one open complaint which is presumably Complainant’s.

Complainant owns commercial property located at 1233 Fawnbrock Dr. Bldg. E., Show Low, AZ 85901.

On or about July 07, 2018, Complainant and Respondent entered into a $489,809.00 contract to remodel the interior of Complainant’s commercial space, and construct an addition, so that it could be used as a child care facility. Complainant obtained a building permit from the City of Show Low. Per the parties’ construction schedule, the project was supposed to commence on August 10, 2018, and conclude on or before February 28, 2019.

On November 05, 2020, the Registrar received a 13-item complaint from Complainant against Respondent’s License No. 191530 alleging poor workmanship and abandonment of their project. The Registrar designated it Complaint No. 2020-05256 and assigned to Chris Allison (“Investigator Allison”) for investigation.

On November 06, 2020, Investigator Allison issued a Jobsite Inspection Notification Letter to the parties, advising that he would conduct an inspection of the project on November 23, 2020, at 10:00 a.m.

On November 23, 2020, Investigator Allison conducted a review of the contract executed between the parties and inspected the work that had been performed on the project to date. He also took 30 photographs of the project site. When he was finished, Investigator Allison drafted his Inspection Notes. Ultimately, Investigator Allison substantiated 5 of Complainant’s 13 complaint items. Specifically, Investigator Allison determined that complaint items 1, 3-4, and 8-9 failed to meet the Registrar’s minimum workmanship standards and required Respondent to perform corrective work to remediate the identified deficiencies.

On November 25, 2020, Investigator Allison issued a Written Directive from the Registrar (“Directive”) to Respondent because he substantiated some of Complainant’s workmanship allegations against Respondent. Respondent was put on notice that it had until 5:00 p.m. on December 31, 2020, to notify the Registrar of its compliance with the Directive or face discipline pursuant to Ariz. Admin. Code R4-9-108, and Ariz. Rev. Stat. §§ 32-1154(A)(3), 32-1154(A)(22) and 32-1154(E).

On or about January 08, 2021, Investigator Allison issued a Compliance Jobsite Inspection Notification Letter to the parties, advising that he would conduct an inspection of the project on January 29, 2021, at 3:00 p.m.

On January 29, 2021, Investigator Allison inspected the corrective work that had been performed on the project and took 4 photographs. When he was finished, Investigator Allison drafted his Compliance Jobsite Inspection Notes. Ultimately, Investigator Allison determined that Respondent had satisfactorily remediated complaint item 1, but that Respondent had not performed corrective work necessary to remediate complaint items 3-4 or 8-9.

On February 08, 2021, Investigator Allison forwarded the matter to the Registrar’s legal department with the issuance of a Citation Recommendation.

On February 12, 2021, the Registrar issued a Citation to Respondent for alleged violations of Ariz. Rev. Stat. §§ 32-1154(A)(3); Ariz. Admin. Code R4-9-108, and 32-1154(A)(22). Respondent was given until February 27, 2021, to respond with its Answer or face discipline pursuant to Ariz. Rev. Stat. §§ 32-1154(A)(22) and 32-1155.

On February 26, 2021, the Registrar received Respondent’s Answer. In pertinent parts, Respondent noted that “I have addressed almost all of the items that [Investigator Allison] required,” and “I am almost complete in addressing there items and hope to be complete in the next 7-10 business days,” [sic] and “[W]ith complications from Covid-19 it has taken a while to get subs and workers out to get everything done.” Respondent argued that “[B]ecause it is an operating day care center we have only been allowed to go in after business hours and the weekends.” [sic]

On March 05, 2021, the Registrar referred this matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing on April 16, 2021. Per the March 12, 2021, Notice of Hearing the issues to be determined are whether the Registrar has cause to discipline Respondent’s license based on the following alleged statutory violations:

Charge 1: A.R.S. § 32-1154(A)(3) – A.A.C. R4-9-108

Charge 2: A.R.S. § 32-1154(A)(22)

Hearing Evidence

Complainant testified on her own behalf and called Investigator Allison as a witness. Aaron Binnie testified on behalf of Respondent. The Registrar’s agency file and Notice of Hearing were admitted into the record as their own exhibits. The substantive evidence of record is as follows:

Complainant obtained a bank loan from to pay Respondent for the underlying project. In sum, Complainant paid Respondent $530,662.35.

Several Change Orders were executed between the parties for the underlying project, totaling an additional $40,853.35 in charges.

On April 05, 2021, Investigator Allison issued a Prehearing Jobsite Inspection Notification Letter to the parties, advising that he would conduct an inspection of the project on April 13, 2021, at 10:00 a.m.

On April 13, 2021, Investigator Allison inspected the corrective work that had been performed on the project. Ultimately, Investigator Allison determined that Respondent had satisfactorily remediated complaint item 3, but that Respondent had not performed corrective work necessary to remediate complaint items 4 or 8-9. It was also noted that Respondent had performed corrective work on a number of items not identified for remediation by the Registrar’s Directive.

On April 16, 2021, Respondent provided sufficient evidence to the Registrar to establish that he had remediated complaint item 9.

In closing, Respondent admitted that completion of Complainant’s project had taken longer than he had expected, which was longer than it should have, and that he still intended to finish corrections necessary to complete the job.

In closing, Complainant argued that discipline against Respondent’s license was warranted so that consumers in her position could be protected. Complaint opined Respondent had evinced his intent not to finish the project, given the number of extensions she provided in order for Respondent to complete the job.

CONCLUSIONS OF LAW

The Registrar has jurisdiction over this matter pursuant to Ariz. Rev. Stat. §§ 32-1101 et seq. and 32-1154(A). The matter was properly brought before OAH pursuant to Ariz. Rev. Stat. §§ 41-1092 et seq.

The purpose of the Registrar’s licensing statutes is to protect the public from unscrupulous, unqualified, and financially irresponsible contractors.

The Registrar may resolve contractual disputes if such resolution in ancillary to its regulatory mission and may penalize a contractor’s license by ordering payment of restitution if a proven statutory violation was not remedied by corrective action.

Complainant bears the burden of proof to establish cause to discipline Respondent’s license by a preponderance of the evidence. Respondent bears the burden to establish factors in mitigation of the penalty and affirmative defenses by the same evidentiary standard.

“A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.” A preponderance of the evidence is “[t]he greater weight of the evidence, not necessarily established by the greater number of witnesses testifying to a fact but by evidence that has the most convincing force; superior evidentiary weight that, though not sufficient to free the mind wholly from all reasonable doubt, is still sufficient to incline a fair and impartial mind to one side of the issue rather than the other.”

Ariz. Rev. Stat. § 32-1154(A)(3) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[v]iolation of any rule adopted by the registrar.”

Ariz. Admin. Code R4-9-108 requires that “[a]ll work shall be performed in a professional and workmanlike manner” and that “[a]ll work shall be performed in accordance with any applicable building codes and professional industry standards.”

Ariz. Rev. Stat. § 32-1154(A)(22) provides, in pertinent part, that “[a] holder of a license may not fail to take appropriate corrective action to comply with this chapter or rules adopted pursuant to this chapter without valid justification within a reasonable period of time after receiving a written directive from the registrar. The written directive shall set forth the time within which the contractor is to complete the remedial action. The time permitted for compliance shall not be less than fifteen days from the date of issuance of the directive. A license shall not be revoked or suspended nor shall any other penalty be imposed for a violation of this paragraph until after a hearing has been held. The Registrar has the authority to issue license discipline under this provision, including summary suspension, revocation, or imposing a civil penalty or recovery fund award.”

Ariz. Rev. Stat. § 32-1154(E) provides, in pertinent parts, that the Registrar may “[i]mpose a civil penalty not to exceed five hundred dollars on a contractor for each violation. The failure by the licensee to pay any civil penalty imposed results in the automatic revocation of the license thirty days after the effective date of the order providing for the civil penalty.” It also provides that “[n]o future license may be issued to an entity consisting of a person who is associated with the contractor, unless payment of any outstanding civil penalty is tendered.”

The material facts in the case at bar are not in dispute.

It is undisputed that the Complainant paid Respondent for a remodel and addition of a commercial daycare space. It is also undisputed that Respondent did not complete the project per the terms of its contract, and that some of the work Respondent performed did not satisfy the minimum standards set for workmanship by the Registrar. It is further undisputed that Respondent failed to timely and completely comply with the Registrar’s Directive.

Therefore, the only issue in dispute is whether Respondent raised a sufficient justification or excuse for failing to adhere to the Registrar’s Directive and complete Complainants’ project per contract. This is an affirmative defense that Respondent bears the burden to establish. Here, Respondent did not sustain his burden. There is no evidence in the record that excuses or otherwise justifies Respondent’s inaction and/or lack of performance on this project.

Therefore, because Complainant has established Respondent’s violations of Ariz. Rev. Stat. §§ 32-1154(A)(3); Ariz. Admin. Code R4-9-108, and 32-1154(A)(22), Complainant has also established cause for the Registrar to discipline Respondent’s contractor’s license.

RECOMMENDED ORDER

Based on the foregoing,

IT IS RECOMMENDED that five days after the effective date of the Final Order in this matter, Respondent Coues Ridge Construction LLC, ROC License No. 191530, be suspended for two (2) days based on its violations of Ariz. Rev. Stat. §§ 32-1154(A)(3) and 32-1154(A)(22).

IT IS FURTHER RECOMMENDED that the Registrar require Respondent to pay the sum total of $500.00 in certified funds as a civil penalty in this matter.

IT IS FURTHER RECOMMENDED that if Respondent fails to pay the entire amount of the civil penalty on or before thirty (30) days following the effective date of the Registrar’s Final Order, the Registrar shall revoke Respondent’s license, effective on such deadline date. No future license shall be issued to any entity consisting of persons associated with Respondent, as defined in Ariz. Rev. Stat. § 32-1101(A)(5), unless Respondent tenders payment of any outstanding prior civil penalty.

In the event of certification of the Administrative Law Judge Decision by the Director of the Office of Administrative Hearings, the effective date of the Order will be 40 days from the date of that certification.

Done this day, May 06, 2021.

Office of Administrative Hearings

/s/ Jenna Clark

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors